Compendium admissions 2023-25
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| Relative Market Share Relative market share is used as a surrogate of competitive strength. The larger the firm’s market share, relative to its largest competitor, the stronger the firm is in the marketplace. Four Blocks in BCG Matrix Dogs: If a company’s product has a low market share and is at a low rate of growth, it is considered a dog and should be sold, liquidated, or repositioned. Products in this category don't generate much cash for the company since they have a low market share and little to no growth. Cash Cows: Products that are in low-growth areas but for which the company has a relatively large market share are considered cash cows and the company should thus milk the cash cow for as long as it can. Stars: Products that are in high-growth markets and that makeup a sizable portion of that market are considered stars and should be invested in more. In the upper left quadrant are stars, which generate high income but also consume large amounts of company cash. Question Marks: Questionable opportunities are those in high growth rate markets but in which the company does not maintain a large market share. Question marks are in the upper right portion of the grid. They typically grow fast but consume large amounts of company resources. The usual movement SBUs follow is from Question Marks to Stars to Cash Cows. 64 GE Matrix The GE matrix was developed by McKinsey and Company consultancy group in the s. The nine-cell grid measures business unit strength against industry attractiveness. Whereas the BCG matrix is limited to products, business units can be products, whole product lines, a service, or even a brand. Therefore, this version is considered an improvement over the BCG matrix. Industry attractiveness is dependent on a number of factors that can be assigned different weights. These factors include but are not limited to Market size, growth, profitability, pricing trends, entry barriers, and competitive intensity. Similarly, competitive strength is dependent on strength of assets and competencies, market share, customer loyalty, and profit margins. Download 4.08 Mb. Share with your friends:
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